An average home in Chicago costs $295,000. If house prices are expected to grow at an average rate of 3% per year, what will a house cost in 5 years?
A) $328,995.61
B) $338,941.27
C) $341,985.85
D) $347,028.19

Question

Quizplus · Accepted Answer

To calculate the cost of a house in 5 years, we can use the formula:
Future value = Present value * (1 + rate of growth)^number of years
Plugging in the values, we get:
Future value = 295,000 * (1 + 0.03)^5
Future value = 295,000 * 1.159274
Future value = 341,985.85
Therefore, the cost of a house in 5 years will be $341,985.85, which is closest to option C, $341,985.85.

An Average Home in Chicago Costs $295,000